Mar 05 2011

Why Hospitals Don’t Want Employed Physicians to (Really) Succeed

You’d think that after spending millions of dollars setting up a foundation model entity to employ physicians, or even going out, in those states without prohibitions on the practice of medicine, and employing physicians directly, that hospitals would want you to succeed.

Well, they do, sort of — but only to a point.

Historically, physician practice was entrepreneurial.  For one reason or another, chiefly related to the complexity of running a practice in today’s economy, many physicians have chosen the hospital employment route.

But despite any assurance to the contrary, once within the hospital’s bureaucratic model the rules change:  You are managed because that is what bureaucrats do.

You’ll be free to develop your expertise but not to the point that you will become a star.  If you were allowed to become a star, you would obtain leverage and might leave.

There’s a tension to have scores of mediocre physicians on the team – entrepreneurial physicians and those striving for personal excellence are too much of a threat.

You’ll be paid fairly well, but not above what are actually mediocre levels such as the 75th percentile on employer-favorable surveys. At that level you will be paid more than most, if not all, of the bureaucrats in hospital administration and paying you more will be viewed as “unfair.”

Of course, over time, with more physicians being among the employed, the actual dollar amount of 75th percentile compensation will spiral downward. But not as low as that of physician assistants, specialty trained nurses armed with newly minted “doctor” degrees, and other physician extenders who will be used by your employer to muscle you out of a large part of your clinical role.

After all, to the bureaucrats in charge, even those bureaucrats in white coats, it will be done in the name of efficiency.

In a way, it’s like the classic Twilight Zone episode, To Serve Man:  You might feel that you are participating in something greater, but the reality is that you’re on the menu.

Mark F. Weiss

www.advisorylawgroup.com

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Jan 20 2011

Accountable Care Organizations: A Reactionary Grasp Not a Revolution in Patient Care

Proponents of the ACO model argue that this time it’s different, that the model is not about controlling physicians, it’s about clinical issues and getting physicians integrated with other providers, both in respect of macro issues (e.g., establishing protocols, determining best practices and the design of studies) and micro issues (e.g., the coordination of a particular patient’s care).
But that argument entails a large dose of revisionist history:  The proponents of prior movements to manage physician behavior, for example, managed care and integration models such as the PHO, did not sell their wares, at least publicly, as such – they, too, touted their models as being for the betterment of patient care.
“Managed care” was said to be about managing how care is delivered across multiple providers.  HMOs were said to deliver better and more efficient care because they were premised on maintaining health, not waiting to treat disease.  And PHOs were all about aligning the incentives of physicians and hospitals such that better care was delivered more efficiently.
The truth is that this time it is different, but in a very different way that ACO proponents believe.  Over the decades since the beginning of the managed care movement, the microchip revolution has made it even more possible for disparate participants to coordinate care in the absence of any actual command and control authority.  The changes made possible through advances in technology are democratizing and an assault on those who want to control from the top down.
Viewed in the light of technology, and the fact that its progress will continue at an even faster pace, the ACO model is a reactionary step, a grasping gasp by those wishing to impose control which is not needed in terms of the actual coordination of care.

Proponents of the ACO model argue that this time it’s different, that the model is not about controlling physicians, it’s about clinical issues and getting physicians integrated with other providers, both in respect of macro issues (e.g., establishing protocols, determining best practices and the design of studies) and micro issues (e.g., the coordination of a particular patient’s care).

But that argument entails a large dose of revisionist history:  The proponents of prior movements to manage physician behavior, for example, managed care and integration models such as the PHO, did not sell their wares, at least publicly, as such – they, too, touted their models as being for the betterment of patient care.

“Managed care” was said to be about managing how care is delivered across multiple providers.  HMOs were said to deliver better and more efficient care because they were premised on maintaining health, not waiting to treat disease.  And PHOs were all about aligning the incentives of physicians and hospitals such that better care was delivered more efficiently.

The truth is that this time it is different, but in a very different way than ACO proponents would have you believe.  Over the decades since the beginning of the managed care movement, the microchip revolution has made it even more possible for disparate participants to coordinate care in the absence of any actual command and control authority.  The changes made possible through advances in technology are democratizing and an assault on those who want to control from the top down.

Viewed in the light of technology, and the fact that its progress will continue at an even faster pace, the ACO model as viewed by its hospital-centric proponents is a reactionary step, a gasping grasp by those wishing to impose control over physicians, control which is not needed in terms of the actual coordination of care.

Mark F. Weiss

www.advisorylawgroup.com

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Jan 18 2011

How to Extract More Than Fair Market Value

Healthcare deal compliance, in terms of antikickback, Stark, and tax exempt entities, often turns on the propriety of the consideration paid. And that turns on the concept of fair market value, which is often neither fair nor indicative of value.

That’s because fair market value is defined for those purposes in a fashion that ignores economic reality, such as the Stark definition of “the value in arm’s-length transactions, consistent with general market value and, with respect to rentals or leases, the value of rental property for general commercial purposes (not taking into account its intended use) and, in the case of a lease of space, not adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor where the lessor is a potential source of patient referrals to the lessee.”

In other words, the value attributable by the actual parties to the relationship, strategic value, is not permitted to be considered.

Understandable, perhaps, as the notion is to do away with value based on the worth of referrals.

But completely ridiculous if you want to be paid for the actual value you are providing while still excluding any value relating to referrals.

The solution is not to run the risk of noncompliance by ignoring required definitions of fair market value.  Rather, it is structuring your business operations and the scope of deals to capture and extract strategic value outside of the regulated realm.  Not all practices can do this.  But if yours can, and it is not, then you’re leaving significant dollars on the table.

Mark F. Weiss

www.advisorylawgroup.com

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Jan 11 2011

Self-Referral of Imaging Studies as Weapon

According to a report in the January issue of the Journal of the American College of Radiology, a study reveals that the total amount of Medicare payments to non-radiologist physicians for non-invasive diagnostic imaging is greater than that paid to radiologists.  The reason:  self-referral within non-radiology practices.

No real news as to the role of self-referral.

The question, though, for radiologists, even at the hospital level, is how the self-interest of cardiologists, primary care physicians and orthopedists, the non-radiology specialists receiving the most imaging money from Medicare, can be used by radiologists as a part of a strategy to capture more of the total market for imaging studies.

In other words, it’s one thing to be lobbying for changes in both state and federal self-referral laws, but quite another to use self-interest and “conflicts of interest” as tools at the medical staff and hospital administration level.  Said by the lead author of the study, the issue is a political hot potato.  Yes, it is, which is why it’s easier to toss into the laps of those on the medical staff than it is to toss all the way to the state capital or to Washington.

Mark F. Weiss

www.advisorylawgroup.com

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Dec 31 2010

New Years UnResolutions for 2011

I’ve sometimes wondered about the amount of importance attached to the arbitrary selection of the date we call January 1, New Years Day, as the date on which to make resolutions about our future behavior. Perhaps I’ve waxed way too philosophical, but why January 1 – after all, prior versions of our calendar began the year on March 1 and didn’t even have a January – and why not make resolutions any day . . . if you intend on keeping them?

But the notion of a fresh start is important; a clean break from the past. Last year at this time I suggested that instead of making resolutions to do something, you consider resolving to stop engaging in some destructive physician business behavior. You can watch that videocast, New Years UnResolutions, Wisdom. Applied. No. 12, on the ALG website.

This year, I’d like to continue that trend, with some UnResolutions for 2011:

Number 1. Don’t buy into thinking that the hospital is “forming” an ACO. Instead, adopt the mindset that you and your fellow physicians will work with the hospital on ACO formation and governance — and then hijack the process to assure “cooperation” with terms dictated from the physician standpoint.

Number 2. Don’t believe that you play a part in the “healthcare system.”  Remember that those who say that “it takes a village” see themselves as the mayor.

Number 3. Don’t think of your practice as being in one particular business, the provision of your specialty’s services.  Think in more entrepreneurial terms and consider unlocking the potential value of its intellectual property, either as a separate service line or as a separate venture.

And last but not least, Number 4. Don’t consider your professional services as your practice’s product.  Your practice is the product – make that product unique.

Happy New Year.

Mark F. Weiss

www.advisorylawgroup.com

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Oct 29 2010

Customer Service Services You

I’ve written before about the importance of customer service (see, for example, my blog posts of  September 26, 2009, and June 3, 2009, or my article Securing Customer Satisfaction).

Many medical groups have trouble focusing on improving customer service, and in getting their providers to implement tactics to support the group’s customer service strategy, because they view customer service as something that solely benefits the customer.

Although it’s true, by definition, that customer service is customer-centric, it’s also of high value to the servicer, on many levels.

Providing high-value customer service to patients, referring physicians and facilities, is a significant part of creating an experience monopoly that serves to protect and preserve your competitive position and contractual relationships.

A focus on customer service becomes a lever to improve the group’s overall performance, thus delivering a multiplier effect.

It may be difficult to start up, but once a system is in place it creates its own inertia.

Importantly, it creates an atmosphere that is far less stressful in the long run, and far more fun.

Mark F. Weiss

www.advisorylawgroup.com

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Oct 19 2010

Lemons to Lemonade

In the relationship between a physician group and a hospital, problems happen.  Planned or unplanned.

For example:  Someone finds a partially used vial of drugs that was not properly disposed of.  The CEO complains about your level of service.

Most groups view these events tactically:  They happened.  Now what?  Accept responsibility?  Ignore and hope it goes away?  Blame it on someone else?

But when viewed strategically, most problems in this context are indeed opportunities.   I’m not talking simply frame of mind, as in “every problem is an opportunity in disguise” or even pseudo scientific NLP.  I’m talking actual opportunity — a situation that can be flipped and made, through very fast filtering through your group’s overall strategy followed by very fast deployment of a conforming tactic back to the source or a relevant third party.

I call this strategy The Situation Transformer™ — it’s making lemons into lemonade.

When a problem of this sort next occurs for your practice, think what advantage can be gained.  But to do so effectively requires that the advantage be in the viewed through the lens of overall group strategy — which means you must have one — and that you have the ability to respond more quickly than the hospital can take effective action in respect of the problem.

Mark F. Weiss

www.advisorylawgroup.com

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Aug 11 2010

JetBlue-ing Up Your Practice

The bizarre story of the JetBlue flight attendant who, after an altercation with a passenger, made a profanity-laden speech over the plane’s intercom, grabbed beer from the galley, opened the plane’s door and slid down the emergency evacuation chute, just got even more strange:  He’s become a web sensation, lauded by other self-absorbed losers for his refusal to take it any more.

Many medical groups have their own, physician versions of the flight attendant, prone at any moment to go off on a patient, nurse or colleague.   I guaranty you that no one of sane mind will think it’s funny.

Your relationship with the hospital, your exclusive contract, your group’s referrals and your group’s standing in the larger community will be put at risk.

What are you doing now to prevent this potential situation from blowing up your practice?  What is your back up plan in the event that your preventive action fails?

Mark F. Weiss

www.advisorylawgroup.com

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Jul 02 2010

Physician (non)Ownership of Hospitals

ObamaCare has made it harder than it was before for physicians to own hospitals participating in federal healthcare programs.

One option of course, open for as long as there is still private health insurance coverage, is for physicians interested in hospital ownership to own facilities that exclude federally funded patients.

The other, and perhaps superior option is to consider that controlling a hospital may be better than owing it.  Hospitals, even money losing ones, are expensive to own and operate.  If physicians are blocked from investing in hospitals accepting, for example, Medicare patients, why not focus on non-profits and on district hospitals by gaining control of their boards of directors. 

Sure, you wouldn’t be able to declare a dividend, but the fact is that as hospitals begin to play a larger and larger role on both sides of the healthcare market (facility and provider), for example via Accountable Care Organizations, why not seek to control the controller?

An uphill fight, for sure.  But one that just might be worth it.

Mark F. Weiss

www.advisorylawgroup.com

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May 25 2010

Lies, Damned Lies, Statistics and Acronyms

Disraeli commented that there are lies, damned lies and statistics.  It’s time to add acronyms to the list.

A new acronym to save healthcare has arrived, the ACO, an “accountable care organization.”

But accountability to whom?  And for what care, exactly?  Lastly, and most importantly, who runs the organization?

An ACO, is about power and control over physician services rendered and, importantly, power and control over physicians’ incomes.  ACOs are the intended funnel of payor funds – they serve as a mechanism to distribute those funds and, as such, invoke the Golden Rule:  He who has the gold makes the rules.

Hospitals and their associations are scrambling to build ACO networks.  Don’t for a minute think they have your interest at heart.

The opportunity exists to seek physician control of ACOs:  There is no rule that requires that control run one way, from the hospital to the physicians.  Difficult, yes.  But what’s the real alternative?

Mark F. Weiss

www.advisorylawgroup.com

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